Hyundai, Honda and Two Wildly Different First Quarters

Talk about the tale of two automakers going through opposite first quarters. The earnings for Hyundai and Honda show just how much the earthquake and tsunami has hurt one, while the other is on a roll.

Let's start with Honda. Its quarterly profit plunged 38 percent, largely due to production being halted following the earthquake and tsunami on March 11.

Yes, the rest of Honda's operations around the world continued, but with so much production tied up in Japan, you see the devastating impact of the disaster.

The timing could not be any worse for the Japanese automaker: Its next edition Civic is rolling into showrooms and the company is counting on the popular car giving the company a boost. With 20 percvent of the Civic components sourced out of Japan, there are questions about how hard Honda can hit the Civic launch. A "soft" launch is not the end of the world, but it's far from ideal.

Compare that with the latest earnings from Hyundai , where the quarterly profit jumped 46 percent. Obviously, Hyundai benefited by not having plants in Japan, but that's not the story.

The real story is Hyundai (and subsidiary KIA) being in the sweet spot with a product line driving sales gains around the world, especially in the U.S. (up 28 percent in Q1) and China (up 30 percent in Q1) , the world's two largest auto markets.

Hyundai is also in a position to increase prices in the second quarter, due to the tight supply of new models in the market. Add that to Hyundai picking up sales from Honda, which will have limited production in the second quarter, and you see why the world's fifth largest automaker is forecasted to sell 3.6 million vehicles this year, and 6.3 million when combined with its subsidiary KIA.

If that doesn't get your attention, consider that Toyota may wind up with dramatically lower global sales this year, totaling 6.3 million-7.0 million vehicles. Could Hyundai pass Toyota for global sales this year? Yes, it's possible. Not likely, but possible.

The question is how much of the first quarter and the rest of this year makes a permanent impact. Will Hyundai sustain the market share gains? Probably. Will Honda rebound in 2012, once its production is fully restored around the world? I wouldn't be surprised. One thing is clear, the first quarter shows 2011 is the year Korean auto players become even more prominent players on the global stage.